Dairy Industry Crushes Innovator Who Bested Price-Control System

Fascinating, by Dan Morgan, Sarah Cohen and Gilbert Gaul:

In the summer of 2003, shopers in Southern California began getting a break on the price of milk.

A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the competition, exercising his right to work outside the rigid system that has controlled U.S. milk production for almost 70 years. Soon the effects were rippling through the state, helping to hold down retail prices at supermarkets and warehouse stores.

That was when a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga’s initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).

Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga’s experiment — all without a single congressional hearing.

“They wanted to make sure there would be no more Heins,” said Mary Keough Ledman, a dairy economist who observed the battle.

At the end, participants said, Reid was plainly exasperated. “I’m not listening to any more of this,” he said. “I’m out of here.”

Reid made his move on Dec. 16, with the Senate chamber nearly empty. He brought up the milk bill, which passed a few minutes later by “unanimous consent,” a procedure that requires no debate or roll call vote if both political parties agree. Reid and Kyl said in recent statements that their goal was to level the playing field for milk producers.

Our elected officials at work.

Iraq Update

Fabius Maximus“:

To some, defeat implies a victor. North Vietnam and its allies in the South defeated us thirty years ago. Nothing like that has occurred in Iraq. The collapse of Iraq has no obvious victors. Even Iran might suffer if the instability spreads across the Middle East’s porous borders.


But there are other ways to lose. We’ve found one.

AT&T: No Fiber to the Home

Well, we Wisconsinites subject to AT&T’s new monopoly can pound sand. No fiber for us…. Reuters:

“Our view at this point is that we’re not going to have go ‘fiber to the home.’ We’re pleased with the bandwidth that we’re seeing over copper,” Chief Financial Officer Richard Lindner told a Credit Suisse conference.

“On average, at this point, we’re producing about 25 megabits (per second). But in many many locations, we’re producing substantially more than that.”

Nice to see the status quo – standing still while the rest of the world moves on.

Revenge of the Garlic Farmers, or More Feeding at the Public Till

Alexei Barrionuevo:

For decades, the fiercely independent fruit and vegetable growers of California, Florida and other states have been the only farmers in America who shunned federal subsidies, delivering produce to the tables of millions of Americans on their own.

But now, in the face of tough new competition primarily from China, even these proud groups are buckling. Produce farmers, their hands newly outstretched, have joined forces for the first time, forming a lobby group intended to pressure politicians over the farm bill to be debated in Congress in January.

Nobody disputes that competitive pressures from abroad are squeezing fruit and vegetable growers, whose garlic, broccoli, lettuce, strawberries and other products are a mainstay of world kitchens. But the issue of whether the United States ought to broaden farm subsidies beyond the commodity crops like corn and cotton, which have historically been protected, is a big flashpoint.

Cringely on VOIP Privacy

Robert X. Cringely:


The Communications Assistance for Law Enforcement Act (CALEA — I’ve written about this one before) requires “managed” VoIP operators to provide law enforcement agencies a point of interception so they can tap your VoIP calls. What’s a “managed” VoIP service? Packet8, Vonage, Comcast, and AT&T all certainly qualify, but does Skype? Yes, if you think of billing as management, now that there is SkypeOut and SkypeIn. And given the current management at the U.S. Department of Justice, “managed” could mean pretty much anything.

VoIP interception is usually done at the SBC/proxy. The network operator’s SBCs perform decryption/encryption on the “secure” packets as they go through the node. It is a matter of “trust,” as they say in the industry. If you want to encrypt you must also be willing to trust an SBC/proxy in China, Russia, wherever. That’s the attack point.

Our Lobbyist Friends, the MPAA

TechDirt:

A few months back, of course, you’ll recall the big scandal over HP’s use of “pretexting” to spy on various people to figure out who leaked some information from the board of directors. Pretexting is a nice way of describing a basic form of social engineering identity theft. Basically, you call up a company pretending to be someone in order to get their information. It seems pretty clear it should be illegal, and while Patricia Dunn was eventually charged with crimes over the practice, there were plenty of questions as to whether or not California laws actually made pretexting illegal. This surprised many people, who then started trying to push through such laws, which haven’t really gone very far. In fact, there were similar laws that politicians had tried to put in place earlier that had failed as well.

A bunch of folks have submitted this morning that a Wired News investigation found out that the California law to make pretexting illegal had strong (nearly unanimous) support… until the MPAA killed it. Apparently, MPAA lobbyists explained to California politicians that they need to use this identity theft method to spy on file sharers. This isn’t an idle threat either.

Air Travel Liberalization

Randy @ Boeing:

Earlier this year an important study came out, taking a look at the economic impact of liberalization. And I’ve been meaning to share it with you and talk a bit about what it means for our business.

Over the past 25 years, three main forces have radically changed the airline industry: the regulatory environment, airplane/aerospace capabilities, and airline strategies/business models.

First, changes to government regulations have been critical in shaping the airline industry. Since the deregulation of the U.S. market in 1978, we’ve seen a dramatic shift in domestic and international markets. And we’ve also seen increased liberalization – even “open skies” – in international markets. This freer market access has had the effect of intensifying airline competition and causing airlines to focus more on what passengers want.

The End of Risk Pooling

John Robb:

Another sign that we are increasingly on our own. The insurance industry is rapidly (and inexorably) eliminating the idea of risk pooling:

As insurers use the new techniques to get ever-more-refined estimates of what individual policyholders are likely to cost in the future, they may be tempted to charge people closer and closer to full freight for treating an illness or rebuilding a fire-damaged home. Then even those who benefited from the end of cross-subsidies could see their rates go up as they effectively are asked to pay their own way, rather than share the cost by pooling with others.

The Economist has more.

Two Senators Stop Late 2006 Earmark Stuffed Spending Bills

John Fund:

Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina have decided to take a stand against overspending by objecting to the nearly 10,000 earmarks, or member-sponsored pork projects, larded throughout the spending bills Congress is currently considering.

Their obstinacy has convinced the leadership of the departing Republican Congress that they probably won’t be able to pass spending bills in next month’s short lame-duck session. Instead, they are likely to pass a stopgap “continuing resolution,” which will continue funding all programs at last year’s level until the new Democratic Congress passes its own versions of the funding bills.

ass earmark-stuffed catchall spending bills could save taxpayers a cool $17 billion. All 10,000 earmarks in the pending bills will expire if they aren’t passed by the end of the year.


Overall federal spending has gone up by 49% since 2001, but you wouldn’t know it from the anguished cries of those who regard ever-higher spending as some sort of birthright.

Useful timing, given the upcoming Treasury/Fed trip to China to talk about exchange rates and China’s extensive dollar reserves (movement away from dollar reserves could be a real problem for the United States). Much more on earmarks, including local commentary.